Covenant Transportation Group Inc. said Wednesday that its first-quarter loss narrowed to about one-fourth of what it was a year ago, as freight demand was "reasonably good."

The Chattanooga-based trucking company said its net loss was $640,000, or 4 cents per share, for the three months ended March 31, compared with a net loss of $2.5 million, or 17 cents per share, a year earlier.

Revenue was $157 million, compared with $156.4 million a year earlier.

Analysts, on average, expected a loss of 17 cents per share, on revenue of $155 million.

The company said average freight revenue per mile rose 5.8 percent.

But Covenant CEO David Parker warned in a statement that the trucking industry faces several challenges in managing its costs this year.

"Continued progress on yield improvement and efficiency will be necessary as our industry faces cost pressure from driver wages, fuel and equipment prices, insurance and health care, and other expenses, as well as utilization pressure from regulatory and other sources.," he sad in the company's quarterly release.

Shares fell 11 cents to close Wednesday's session at $3.21. The stock was unchanged in after-hours trading.